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Viewing report
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Business Postal Services in the UK Market Assessment
Key Note Publications Ltd, Jan 2002
There is an increasing demand for postal reform across all nations. In many countries, including the UK, national telecommunications and postal services have already been split, with telecommunications provision being completely privatised.
Initial reforms in the UK do not make provision for privatisation of postal services, i.e. the introduction of competition to the provision of services notably, the collection and delivery of letters weighing under 350 grams and costing under £1, hitherto reserved for the national carrier. In the UK, The Royal Mail has been responsible for all letter collection and delivery under its Universal Service Provision obligation.
The Postal Services Act 2000 decreed that The Royal Mail would be permitted to act as if it were a private company - although all its shares would be retained by the Government - but that competition should be introduced in such a way that the universal service would not be compromised. At the same time, a new body - known as The Postal Services Commission (Postcomm) - was appointed to implement these changes.
Many companies operating within the mail services arena - those outside of that reserved for the national carrier - welcome this initiative and, through the granting of licenses by Postcomm to provide specific, but limited, services within the reserved area are able to test their services prior to full market liberalisation.
Postcomm has a difficult path to tread. If private operators are allowed to `cherry-pick' the more lucrative services, and these lie mainly in high-volume business mailings, The Royal Mail, having a legal obligation to provide a universal service, might not be able to offset costs from its less profitable areas against those that are more profitable.
As Consignia plans to rename itself Royal Mail Group in late 2002, and as the Post Office network does not come under the jurisdiction of Postcomm, this report will refer to all of Consignia's mail activities as The Royal Mail.
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